FX.co ★ New Zealand Dollar Extends Gains

On Thursday, the New Zealand dollar reached approximately $0.603, building on gains from the previous day, as the US dollar exhibited general weakness. The American currency hovered near six-week lows following disappointing US economic data, which reignited worries regarding the state of the US economy. Meanwhile, investors exercise caution due to ongoing uncertainties surrounding US trade negotiations, with little headway made as the early July deadline approaches. Market observers will be keenly observing developments in this week’s scheduled US-China trade discussions. Domestically, the Reserve Bank of New Zealand recently reduced interest rates by 25 basis points to 3.25%, as of last week. However, May's decision implies that the easing cycle may be approaching its conclusion. Current market expectations indicate that the RBNZ will maintain rates at its meeting in July, with roughly a 70% probability of a rate cut anticipated in August, potentially marking the cycle's end.